WASHINGTON, Oct 24 Biofuels made from algae,
promoted by President Barack Obama as a possible way to help
wean Americans off foreign oil, cannot be made now on a large
scale without using unsustainable amounts of energy, water and
fertilizer, the U.S. National Research Council reported on
Wednesday.

"Faced with today's technology, to scale up any more is
going to put really big demands on ... not only energy input,
but water, land and the nutrients you need, like carbon dioxide,
nitrate and phosphate," said Jennie Hunter-Cevera, a microbial
physiologist who headed the committee that wrote the report.

Hunter-Cevera stressed that this is not a definitive
rejection of algal biofuels, but a recognition that they may not
be ready to supply even 5 percent, or approximately 10.3 billion
gallons (39 billion liters), of U.S. transportation fuel needs.

"Algal biofuels is still a teenager that needs to be
developed and nurtured," she said by telephone.

The National Research Council is part of the National
Academies, a group of private nonprofit institutions that advise
government on science, technology and health policy.

Its sustainability assessment was requested by the
Department of Energy, which has invested heavily in projects to
develop the alternative fuel.

In 2009, the Department of Energy and the Department of
Agriculture awarded San Diego-based Sapphire Energy Inc more
than $100 million in grants and loan guarantees to help build a
plant in New Mexico that will produce commercial quantities of
algal biofuel. Two other companies received smaller amounts of
federal assistance.

In February, as gasoline prices spiraled, Obama said algal
biofuels had the potential to cut U.S. foreign oil dependence.
He estimated that U.S. oil imports used for transportation could
be cut substantially.

The National Research Council report shows that the
government should continue research on algal biofuel as well as
other technologies that reduce oil use, an Energy Department
spokeswoman said.

"Today's report outlines the need for continued research and
development to make algal biofuel sustainable and
cost-competitive, but it also highlights the long-term potential
of this technology and why it is worth pursuing," Jen Stutsman
said in a statement.

The council's report noted that future innovations, and
increased production efficiencies, could enhance the viability
of algal biofuels.

GREENHOUSE GAS EMISSIONS

It said a main reason to use alternative fuels for
transportation is to cut climate-warming greenhouse gas
emissions created by burning fossil fuel. But estimates of
greenhouse emissions from algal biofuels cover a wide range,
with some suggesting that over their life cycle, the fuels
release more climate-warming gas than petroleum, it said.

The product now made in small quantities by Sapphire uses
algae, sunlight and carbon dioxide as feedstocks to make fuel
that is not dependent on food crops or farmland. The company
calls it "green crude."

Tim Zenk, a Sapphire vice president, said the company has
worked for five years on the sustainability issues examined in
the report. "The NRC has acknowledged something that the
industry has known about in its infancy and began to address
immediately," he said.

He said Sapphire recycles water and uses land that is not
suitable for agriculture at its New Mexico site, where it hopes
to make 100 barrels of algal biofuel a day by 2014.

The U.S. Navy used algal biofuel along with fuel made from
cooking oil waste as part of its "Green Fleet" military
exercises demonstration this summer, drawing fire from
Republican lawmakers for its nearly $27 per gallon cost.

The council study also said it was unclear whether producing
that much biofuel from algae would actually lead to reduced
greenhouse gas emissions.

The report shows the strategy is too risky, said Friends of
the Earth, an environmental group.

"Algae production poses a double-edged threat to our water
resources, already strained by the drought," Michal Rosenoer, a
biofuels campaigner with the group, said in a statement.

Industry group Algal Biomass Organization focused on the
positives in its statement.

"We hope that policymakers and others involved in the future
of the domestic fuel industry will recognize the NRC's
conclusion that sustainability concerns are not a definitive
barrier to future growth."

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